Regional Victoria and the Mornington Peninsula are experiencing some of the most challenging rental conditions in the nation, with warnings that costs could continue to escalate. Suburbtrends’ September Rental Pain Index has highlighted 317 areas across the state grappling with high lease costs and poor vacancy rates, which are significantly impacting tenants’ financial stability.
The Index evaluated 467 regions in Victoria, scoring them based on lease cost increases, affordability relative to income, and vacancy rates. Mornington, Hastings, and Somers received the highest possible distress rating of 100, indicating severe rental stress. Other regional areas such as Castlemaine, Camperdown, Wangaratta, and Myrtleford also scored high, reflecting intense rental pressure.
In Greater Melbourne, suburbs like Sandringham, northern Noble Park, and Clarinda were identified as particularly tough for renters, with scores exceeding 97.
Recent research by PropTrack reveals a 10.6 percent increase in rents over the past year, with Suburbtrends founder Kent Lardner indicating that despite this surge, there may still be room for further increases. Lardner noted that Victorian tenants typically spend less than 30 percent of their income on rent, suggesting that the tight rental market might push rents even higher in the coming months.
Mornington Peninsula real estate agent Geoff Oxford reported receiving multiple inquiries each week from tenants seeking new rental properties, only to find that available options are scarce. Oxford attributed the lack of rental properties to a significant reduction in the rental stock, with estimates suggesting a loss of 30 to 40 percent in the past three years. He also pointed to increased land taxes and potential new levies on Airbnb properties as factors driving landlords to sell their investments.
In Greater Melbourne, Metro Property Management’s Leah Calnan observed that rental properties are taking longer to lease as potential tenants struggle with affordability. She noted that recent inspections often see fewer attendees and applications, with prospective renters potentially deterred by the competitive market and high rent expectations.
Overall, the rental market in Victoria, particularly in regional areas and the Mornington Peninsula, remains under severe strain, with experts warning that conditions may worsen if current trends continue.
